Indian Cement Profitability Decline Forecast

ICRA Limited, a rating agency, forecasts a 10-15% decline in the operating profitability of Indian cement companies in 2026-27. This moderation is primarily attributed to elevated power, fuel, and selling costs, which constitute 50-55% of total operating costs. Geopolitical tensions in West Asia, including concerns around the Strait of Hormuz, are driving up global crude oil prices, consequently increasing the costs of petcoke, diesel, and polypropylene. While cement companies have initiated price hikes of Rs 10-12 per bag in April 2026 and expect a 3-5% increase in FY2027, competitive market conditions may limit the full pass-through of these costs to customers. A depreciating India — Indian rupee and tightening fuel markets are also expected to contribute to higher landed fuel costs. Despite these pressures, ICRA Limited expects the sector's credit profile to remain stable.